Saturday, September 23, 2017

Petition into discovery of Puerto Rico debt to be discussed in court Aug. 22



By on August 11, 2017

SAN JUAN – A hearing has been scheduled for Aug. 22 on a request made by the Official Committee of Unsecured Creditors, which wants a discovery program authorized to determine certain causes of Puerto Rico’s financial crisis.

The hearing before Magistrate Judge Judith Dein will be held in Courtroom 1 of the U.S. District Court Building and in Courtroom 18 of the U.S. District Court for Massachusetts.

The committee recently asked federal Judge Laura Taylor Swain to authorize discovery to determine the role played by Banco Popular, Banco Santander and the Government Development Bank (GDB) in relation to debt obligations burdening Puerto Rico.

Last week, Judge Swain issued an order referring the unsecured creditor committee’s request to Judge Dein. While a hearing was initially slated for Aug. 9, it was postponed. The group recently agreed to postpone the hearing on their petition after stating it was in discussions with the Financial Oversight & Management Board in an attempt to reach agreements that make way for an investigation that is suitable to all parties.

During the board’s last meeting a committee was formed to determine the scope of the investigation and select an independent investigator who will be in charge of conducting the probe.

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The Puerto Rico government had objected to the creditors’ request, arguing that such an undertaking should be carried out by the commonwealth’s fiscal board.

“While [Puerto Rico Fiscal Agency & Financial Advisory Authority, or Fafaa] recognizes that there will be a time and place for such an investigation, the time is not now, and the Committee is not the party to conduct it,” the government said.

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